Cryptocurrency firms in Hawaii are now officially exempt from the requirement to receive a Money Transmitter License (MTL) to run business in the state.
The Hawai‘i Department of Commerce and Consumer Affairs (DCCA) informed the public that the state concluded the collaborative crypto research project Digital Currency Innovation Lab (DCIL) on June 30, 2024.
Initiated in 2020, DCIL aimed to explore the landscape of digital currency activity within the state as well as assess the regulatory framework required for crypto-related companies.
The firms still have comply with the SEC and FinCEN’s regulations
After completing the project, Hawaii authorities ruled that digital currency companies will no longer require a Hawai‘i-issued MTL to conduct business within the state, according to an official statement published on June 28.
“The companies will be able to continue transaction activity as an unregulated business,” DCCA said in the statement, adding that crypto companies will still be responsible for complying with any applicable federal licensing or registration requirements.
Such requirements will include those set forth by the Financial Crimes Enforcement Network (FinCEN), the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority.
Additionally, compliance will involve “any pertinent federal regulatory requirements involving consumer protection,” Anti-Money Laundering measures and others, the statement notes.
Receiving a MTL license requires significant resources
State money transmitter licensing laws are part of the federal U.S. laws and regulations governing the safety and integrity of the payments system in 48 states.
Obtaining the MLT license requires significant investment and resources, such maintenance of permissible investments, minimum net worth, business plan and a compliance program. According to Dilendorf Law Firm, MTL requirements vary state-by-state, which creates a lot of inconsistency and pushes businesses to prioritize some states.
Major industry firms like the crypto payment gateway Alchemy Pay have been actively working with regulators to secure MLT licensing in multiple U.S. states.
Hawaii calls for increasing awareness of crypto-related risks
DCIL Banking Commissioner Iris Ikeda emphasized the importance of ensuring that consumers are aware of the risks associated with cryptocurrencies.
“We urge the public to stay informed when utilizing any form of digital currency,” Ikeda said, adding that spreading awareness on crypto-related risks will be the main focus of the authority as it shifts from the study to a broader understanding of digital currency.
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The statement mentioned that the Federal Bureau of Investigation (FBI) has recently warned the public against a new emerging criminal scheme to further defraud cryptocurrency scam victims. Issued on June 24, the FBI’s warning strongly recommended consumers be wary of advertisements for crypto recovery services, keep private information safe, and not send money.
Previously, the FBI also issued an alert advising the public against using crypto money transmitting services that are not registered as Money Services Businesses, or MSBs.
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